Mugabe blocking Dutch aid for trade in Zimbabwe

A once blossoming horticultural sector, with an important production of flowers like roses, asters and chrysanthemums, has crumbled completely in Zimbabwe. Starting with the disastrous land reform in 2000, now only remnants of this once important economic sector for the country remain visible. The sector is a perfect illustration of how years of mismanagement by president Robert Mugabe has ruined the country.

Zimbabwe is not seldom called the sick man of Africa. Its leader, aging dictator Robert Mugabe, has led his country deep into an economic swamp. Poverty is high and economic development is almost at a stand still. Politically, the country is an international outcast. Many countries have suspended bilateral development aid, and as the numbers show, this has led to a fragmentation in the development aid and a focus on short term relief aid instead of the much necessary long term and focused investments that are prerequisites for trade and economic development.

Resource curse and then some

Zimbabwean exports to the Netherlands amounted to 230 million € in 2012. After Italy and Romania, The Netherlands is the most important European export partner for the landlocked country in Southern Africa. The most important export destinations for Zimbabwean products are neighbouring countries South Africa, Mozambique and Zambia, the United Arab Emirates and China.

The Netherlands (pink) rank number 8 as export destination from Zimbabwe

The composition of the exported goods from Zimbabwe are a perfect example of what economists call the resources curse: the tendency for countries with an abundance of non-renewable resource to have poor economic growth, less democracy and faltering development. The most important export products from Zimbabwe are gold, diamonds, pearls and metals. A distant second are agricultural products. Industrial exports are almost non-existent.

Zimbabwean exports are dominated by gold, diamonds, metals and agriculture and illustrate the so called resources curse

Zimbabwe is indeed suffering from the resources curse: the country and its people suffer from poverty, poor health and corruption, amongst other issues. The country ranks 154th out of 188 on the global ranking of the Human Development Index.

However, exports to the Netherlands look quite different from the total exports. They are an echo of better times for the country.

Vegetable products, including flowers, are an important component of Zimbabwean exports to the Netherlands

The most important category of exports to the Netherlands are vegetable products: vegetables and fruits, but more importantly and maybe a little surprising: cut flowers.

Horticultural production and export, including a blooming flower production, peaked in the 1999-2000 season. But after losing the referendum on the new constitution in February 2000, Mugabe started his infamous land reform program, chasing away white farmers from their estates. As a result, horticultural production collapsed. Today only a remnant of the once vivid agricultural sector is still visible in the flower exports to the Netherlands.

Mugabe's land reform is the perfect illustration of how this dictator ruined (and keeps ruining) his country and its population. Today the country is an international pariah and its citizens are amongst the poorest worldwide.

Aid for trade?

Investment in infrastructure, support for entrepreneurship and trade-related adjustments are recognized as important factors for real economic growth. That is why, since the midst of the years 2000, development aid has an important focus on the entrepreneurial climate trade facilitating infrastructure in developing countries. 'Aid for trade' also guarantees a return on investment for benefactory countries.

Take for example the Dutch development aid to Zambia, the also landlocked northern neighbor of Zimbabwe. In the composition of the Dutch development aid to Zambia we see things like 'business support', 'employment policy' and 'anti-corruption'.

Dutch aid to Zambia has some trade related components...

Compare this to the aid to Zimbabwe:

...which are absent in the aid to Zimbabwe

Aid to Zimbabwe is all about relief and emergency aid, basic health care and things like human rights. There is no aid for infrastructure or measures to promote industry, trade nor entrepreneurship.

Of course this has to do with needs being more basic in Zimbabwe: a lot of Zimbabweans are sick, hungry and poor. These people should be helped first and on the short term before more durable investments and development can take place. But there is more.

From donor darling to donor devil

Zimbabwe used to be a donor darling in the years after its independence in 1980. Schools and hospitals were built and provided services at no cost, the agricultural sector, including the production of horticulturals, was developed and the country was basically debt free. But year after year, Mugabe proved to be a harsh, undemocratic and even bloody leader. Donors and investors shied away and, just as many other countries did, the Dutch removed Zimbabwe from its list of partner countries for development cooperation.

As a result, bilateral development cooperation (from government to government) plummetted and what was left was multilateral and private development cooperation. This led to a fragmentation of the development efforts in the country. The below treemap shows the development organisations active in Zimbabwe, funded by the Dutch.

The splintered development actors landscape

Development projects and funds are scattered. This not only leads to more overhead costs (for coordination, for example, if there is any at all), but things like trade oriented infrastructure and a more business oriented and corruption free climate and government require continued and focused efforts. With a fragmented development actors landscape, this is simply not possible.

Zimbabwean roses and Dutch tulips

Mugabe's mismanagement of the country has led Zimbabwe knees deep into an economic swamp. The now 93 year old despot is still clinging to the power and plans to rule until he dies. Democratic reform is needed, but installing a democracy after Mugabe's death will not be easy.

But with Mugabe gone, with the help of the international community, the country could slowly recover by first tackling the basic needs of its population. After that, trade oriented aid could help the country recover more and integrate into the global economy. And who knows one day the Zimbabwean roses, asters and chrysanthemums could once again set their feet next to the Dutch tulips.